ISPT buys stake in Sydney office block

The Industry Superannuation Property Trust has finalised a deal to buy a 25 per cent stake in the premium- grade 161 Castlereagh Street office tower in Sydney from developer Grocon for about $200 million.

Grocon chief executive
Daniel Grollo
said the group was proud to be forging a new relationship with ISPT on the project, which was conceived during the global financial crisis.

Mr Grollo said the time was right to realise its 25 per cent interest in the project as it reached the halfway mark with a higher than expected environmental rating anticipated.

“We are hoping for a 6 Star Green Star Design Rating from the Green Building Council of Australia in the coming weeks," he said.

The tower is 84 per cent leased, with anchor tenant, ANZ Banking Group, adding three more office floors and further retail space. Officeworks is taking up space on the Pitt Street retail side.

ISPT, which is taking its stake on a yield of about 6.5 per cent, joins the existing investment partners, the unlisted GPT Wholesale Office Fund, which owns 50 per cent, and LaSalle Investment Management, which is also at 25 per cent.

Grocon has flagged more deals with ISPT in the future.

“As with our current partners, we are excited not only about the opportunity to work on this project but also about developing a strong relationship which we can carry forward to new opportunities," Mr Grollo said.